"Our strategy of focusing on top line growth to drive operating profits higher is beginning to take hold"
William Morgenstern, Chairman and CEO

Rent-Way (RWY) reported financial results for its fiscal 2004 first quarter ended December 31, 2003.

Rent Way reported consolidated revenues of $123.6 million versus $119.8 million in the same quarter last year. Revenues from Rent Way's core rental business (which excludes the company's dPi Teleconnect unit) were $117.6 million versus $111.0 million in the same quarter last year. (See our webcast interview (audio) "It Was Destiny" with Dave Dorwart, President of DPI teleconnect)

Same store revenues increased 6.6% versus last year's quarter. Consolidated operating income in the quarter was $8.5 million, up from $4.5 million in the same period last year. Consolidated net loss allocable to common shareholders on a GAAP basis was $6.2 million, or $(0.24) per share versus a net loss of $5.4 million last year or $(0.21) per share. GAAP net loss for the quarter gives effect to accounting charges of $7.1 million (net), including a non-cash accounting charge of $5.7 million related to the conversion feature of Rent Way's preferred stock. Without these significant items, net income allocable to common shareholders would have been $0.9 million, or $0.03 per share.

"Our strategy of focusing on top line growth to drive operating profits higher is beginning to take hold," stated William Morgenstern, Rent-Way's, Chairman and CEO. "Our improvement in comp sales performance and greatly improved operating income is particularly gratifying. Looking forward, we will continue to focus on top line growth and increasing our operating income."

William McDonnell, Vice President and Chief Financial Officer stated, "We exceeded our earlier guidance on revenue and operating income for the period. Shareholders should note the $5.7 million charge mentioned above, the largest single non-cash charge in the quarter, is directly related to the healthy improvement in our stock price over the quarter. SFAS 133, Accounting for Derivative Instruments and Hedging Activities, requires Rent Way to evaluate the value of the imbedded derivative in the company's $15 million preferred stock instrument. This charge does not reflect any increase in our cash obligations to the preferred shareholders."

The company reported EBITDA for the quarter of $12.6 million versus $10.6 million in the same quarter last year. EBITDA as defined by the Company is operating income plus depreciation of property and equipment and amortization of goodwill and other intangibles. The Company believes EBITDA provides investors useful information regarding its ability to service its debt and generate cash for other purposes, including for capital expenditures and working capital. The Company reported net cash used in operations for the quarter of $20.3 million versus $18.2 million in the same quarter last year. Reconciliations of the non-GAAP measures mentioned above to the nearest comparable GAAP measures is presented in the chart of supplemental information attached to this release.

Rent-Way's Earnings Conference call will be held Today; Wednesday, February 4, 2004 at 4:30 PM (EST). The conference call is available live online and can be accessed through RTO Portfolio.